Commentary on Economics for a Full World
It was a pleasure reading this essay.
Together with Johan Rockström’s “Bounding the Planetary Future” and, may I say, my own “The Degrowth Alternative,” we have three essays which, complementing one another in their diversity, make a strong case for limiting growth and searching for alternatives for prospering without growth. For those of us trained in ecological economics, Herman Daly’s work remains the reference, the “textbook” from which we learn about the fallacies of mainstream economics. And as this essay demonstrates, his theoretical framework remains as strong as ever, a powerful antidote to the “empty world” fantasy of mainstream economics, where there are only firms and consumers, endlessly circulating an ever-growing amount of goods and services.
Daly’s ten policies are innovative and open up an alternative intellectual ground in a public debate stuck between austerity on the one hand and stimulus on the other, both of them predicated on relaunching growth.
Finally, I enjoyed that the essay did not shy, as most modern economists do, from engaging with philosophical questions, interrogating the ultimate meaning to which economic activity is to contribute.
But I have also three points of which I am less convinced and which raise questions with which I am also confronted when defending degrowth.
First, I am not convinced by Daly’s insistence on the term “development.” Ever since the Truman doctrine, development has been associated with an imaginary of colonized nations “catching up” and becoming like their colonizers “ahead.” GDP leagues of tables, and processes of capital accumulation and technological innovation, are at the heart of both growth and what has come to be known as “economic development.” Development and growth are so intertwined that in some languages, such as my native Greek, they are expressed by the same word. Development without an ultimate end is pursuing what can be pursued, which is what is wrong with growth. I would prefer therefore the use of different, more qualitative, and less historically loaded terms, such as “flourishing” instead of developing, or “prosperity” without growth, instead of development without growth.
Second, Daly maintains the, problematic in my view, distinction in economics between positive and normative analysis. His proposals are addressed implicitly to some “benevolent” policymaker, supposedly willing to find the optimal way for maximizing the public good. We know that there are no such policymakers, and that even the more radical governments or electorates are worlds apart from the spirit or details of the ten proposals. I am keen to hear how Daly sees the “political economy” and the social and political dynamic through which his proposed policies may plausibly be realized. This is a normative point, but one informed by political-economic or sociological analysis. I would like to hear from him what type of governments he imagines implementing his ten policies and how and where does he see them coming to power. I am also interested on questions of global governance, and why and how any single nation could take the lead in imposing caps in its emissions or top incomes without destructive capital flight.
Also, and in relation, I am interested in what has changed politically and why, since the first time he started writing about steady-state economics. If something, the 1970s were a much more favorable era for our ideas. President Johnson was contemplating a future without growth, and the European Commissioner Sicco Mansholt was calling for zero growth. The Italian Eurocommunists had “revolutionary sobriety” at the heart of their agenda, and the German Greens were founded with an electoral agenda not very different from Daly’s ten proposals. He himself was published by the American Economic Association (a venue out of reach for ecological economists today), and even hired by the World Bank. How did the tide turn against steady-state economics, and what are the political lessons for our generation of scholars and politically-minded people?
Third, those of us writing against growth are guilty of some inconsistency regarding whether we claim that growth is coming to an end on its own or whether we want to make it come to an end, as a response to its environmental and social impacts (e.g., climate change). This produces certain tensions. If the former is the case, then it is not clear why we should intervene to limit growth. There is a tension also insofar as we lament the exhaustion of resources like oil, where it is precisely their exhaustion that is necessary for ending growth and the associated with it environmental destruction. I notice this also in Daly’s essay, where it is not clear to me whether he is arguing that:
- GDP growth is coming to an end (if so, then why and where is the evidence for it),
- That genuinely economic growth has come to an end, but nominal GDP may keep increasing (then the question becomes who has a benefit to keep uneconomic growth going), or
- That growth continues, and we should therefore cap it, before it destroys the planet.
Personally, the argument that growth is coming to an end naturally, as a result of its ecological limits, does not convince me, although I have often made it, trained as an ecological economist as I am. Capitalism has surprised us with its creativity repeatedly in the past, and it might do once again. Daly’s “fish example” suggests that growth in fisheries naturally ends when the fishing stock is exhausted. Yes, but then comes aquaculture with genetically modified fish. Growth in fish sales is sustained, though the ecosystem, our food chains and our bodies are irreversibly changed to something new. Isn’t such creative destruction the history of growth and capitalism? Whether climate change is the ultimate limit upon which growth will stumble is an open question, but I wouldn’t rush to put my bets on it.
This is also why I personally prefer Richard Norgaard’s coevolutionary framework—whereby society and ecosystems coevolve, one constantly transforming the other, society adapting, for better or for worse, to its transformations—to the one offered by Daly whereby society is externally limited by a natural ecosystem. We have constantly transformed nature, and we will continue doing so. The problem is not that we are going to run out of oil, or that a climate catastrophe will bring growth, or much less life, to an end. Growth might well bounce back after a climatic disaster as it did after the catastrophe of the Second World War and the devaluation that it brought. And human life will continue no matter what happens to the climate, social organization taking new shapes and forms. The problem from my perspective is not that things will somehow end after crossing a limit, but that the socio-natural coevolution that will take place and the “socionatures” produced after our transformations, and after the crossing of thresholds and boundaries, will be ones that are fundamentally undesirable and unequal. This won’t be a planet worth living in for the majority of its inhabitants (though not necessarily for all)—and therefore one that we should avoid.
As a forum for collectively understanding and shaping the global future, GTI welcomes diverse ideas. Thus, the opinions expressed in our publications do not necessarily reflect the views of GTI or the Tellus Institute.